Subway v. Budway, 2021 FC 583

Earlier this month, Subway scored a legal victory in a trademark infringement claim against Budway Cannabis Store who didn’t bother showing up at trial (blame it on the “bud”, I guess).

The court based its analysis on a previous ruling Toys R Us v. Herbs R Us, 2020 FC 682 flowing from very similar facts.

The fact that “budway” is not itself a word means that it would tend to be read in a manner to connote the common word “subway.” (at para. 20)

The two logos displayed in this post are distinguishable from one another by one single element, a cannabis plant. Is it enough to avoid likelihood of confusion?

Along with injunctive relief, the Federal Court awarded Subway $45 000 in damages and $25 000 costs, but no punitive.

The resemblance in the logos is such that they look nearly identical. it clearly goes beyond feigned lack of originality or pure coincidence. This is 100% infringement. It is clearly intentional, but there is no evidence it was done in full knowledge of the alleged harmful consequences on Subway’s goodwill. The Whiten criteria are not made out. In the intellectual property sphere, punitive damages have been awarded in cases of “outrageous” or “highly reprehensible” conduct, or conduct that constitutes a “callous disregard for the rights of the Plaintiff or for injunctions granted by the court”.

the existence of a goodwill is reinforced by the respondents conduct in taking advantage of that goodwill” (para.32)

“[40] Goodwill attaching to a trademark is the benefit to the trademark owner arising from the “reputation and connection” identified with the goods in association with the mark (Veuve Clicquot at paras 50–52). As the Federal Court of Appeal noted in Sandhu Singh, the purpose of the goodwill assessment is different for depreciation of goodwill than it is for passing off, although the factors considered for each may overlap. Relevant factors for assessing goodwill for purposes of section 22 include fame, degree of recognition, volume of sales, depth of market penetration, extent and duration of advertising and publicity, geographic reach, inherent or acquired distinctiveness, channels of trade, and the extent to which the mark is identified with a particular quality (Veuve Clicquot at para 54).”

I think that Budway should’ve appeared at trial to fight the goodwill depreciation argument. Despite the obvious linkage, connection, or mental association likely to have an effect on goodwill, it doesn’t mean that goodwill depreciation happened, and if it did, it doesn’t mean that it stands in causal connection with Budway.

First of all, we are in a pandemic, it is reasonable to infer that every major fast food chain’s goodwill has been affected in a negative way. Under the circumstances, it is kind of convenient for Subway to blame trademark dilution on Budway. Cannabis dispensaries have been declared essential by Public Health because of the therapeutic value they bring to society. In contrast, pushing non organic, unhealthy, and otherwise toxic food that puts people at heightened risk of thrombosis (among many other things), contradicts the public’s notion of a “healthy and active” lifestyle during a covid pandemic. Second, even if there was any direct impact on Subway’s goodwill, that impact is more likely to have been beneficial rather than detrimental, given that the Budway logo keeps generating strong social media engagement in a manner that indicates the respondent has little control over its dissemination.

The minute I saw the Budway logo, it made me think of an Andy Warhol artwork. It could be displayed in a museum as pop art / parody of fast food and consumption of processed food and a symbol against climate change (which is directly linked to meat processing).

The artistic value of trademark infringement is never relevant, Andy Warhol has lost cases too. Being a “good person” (one that doesn’t destroy the planet) is not a carte blanche to infringe, but in this world you cannot both care about the planet and defend Subway in the same sentence. This is maybe one of the very limited circumstances that I would side with an infringer.

The point is that goodwill is an intangible that keeps changing. Proving dilution is complex and outside of a contradictory process it remains pure speculation.

In spite of the injunction, the Budway logo continues to maintain a strong online presence and is displayed on several e-commerce fronts in many variations of the same logo as of right now. Welcome to Canada!

Teksavvy Solutions and Bell Media, 2021FCA10

The Federal Court of Appeal confirmed a site blocking order that was touted as the “first ever” in Canada back in 2019. The Federal Court of Appeal is right. I sincerely hope to see such orders much more often and on an interlocutory basis. Too many defendants are using the morbid slowness inherent in our justice system to allege some bogus “rights” to be resolved at trial and commit unfettered infringement in the meantime.

The order can be accessed here.

IMHO, ISP-blocking must be available at an interim stage and even before. There should be a presumption in favor of blocking, to protect consumers, improve access to justice, block the floodgates of litigation by powerful copyright holders, etc.

Moreover, the notice and notice system as opposed to notice and takedown is a total aberration and at times it looks like it is drafted in such a way to precisely render the process inefficient. Notice and Notice consists of finger-pointing in a chain reaction. The goal is to dilute service providers’ liability to a maximum and eventually pin all piracy on a handful of individual consumers, such as teenagers and grandmas whose confidential information is wrongfully sent to powerful copyright holders (a.k.a. delusional movie studios) for the purpose of extorting settlements. The more vulnerable the consumer, the easier to abuse by powerful copyright holders.

ISP blocking eradicates piracy from the source. It is the only way forward. No individual consumer should pay for this. Those who give consumers access to pirate sites are the only ones to blame, not the consumers.

Consumers are persistently hit with cyber-attacks, their private information is leaked by banks and service providers everywhere and the pandemic made it all a little worse. How convenient to blame all cyber-crime on single IP addresses. Criminalizing consumers while letting Pornhub off the hook.

If Canada wants to shake off its reputation of infringement haven, our regime has to align with the US notice and takedown regime which is followed worldwide due to Big Tech predominantly operating under US law. To draw an analogy, we have witnessed with our own eyes that it is impossible to tackle a pandemic without a concerted worldwide effort. Closing borders is a demonstrably limited solution or rather a mild failure. There are no borders on the internet. Issues arise on a global level and have to be addressed from a global perspective. A unified worldwide IP legislation is the only decent way forward.

As for the interveners, I don’t understand why academic copyright activism is so consistently aiming to destroy economic rights. But this is not everything academic activism has destroyed.

When you live your life in a bubble and pretend that the internet hasn’t compromised countless lives and the privacy of billions of people, then you only worry about copyright for free and unfettered access to information to a public that keeps misusing the internet to harm vulnerable persons. You reason from your own idealized utopia.

This academic utopia in Canada is the reason why countless survivors are suing Montreal company Mind Geek in the USA. Stop discounting the suicides caused by crimes committed in the name of “net neutrality”. If net neutrality means that courts should never do anything about egregious cybercrime, such as piracy and distribution of non consensual porn, then net neutrality has worked out great so far to make the world a more suicidal place.

Call me totalitarian, I am 100% for ISP blocking of unlawful content, before it is shown whether or not it is unlawful. In general I am for search engine delisting (or not listing from the outset) social media censorship, taxing big tech, massive take-downs, reducing access to harmful sites, dissuading hate-speech and online discrimination and so much more…

3.5 billion people on this planet live without internet. That gives me hope. It means it is possible.

Google Wins Decade Old Fair Use Case

GOOGLE LLC v. ORACLE AMERICA, INC. is surprisingly elaborate considering that fair use doctrine is already settled. We think that Google could have won even without the fair use doctrine. Snippets of code must matter to deserve copyright protection.

In Canada, Google would have lost under fair use doctrine, because commercial use always negates fair use under the Canadian Copyright Act. Canada doesn’t have much say on Any monetization in Canada will put you under the economic copyright regime, so you’ll need a licence. However, even though Google has business in Canada, it is safe to say that any significant tech-related lawsuit will be brought under US and California law in 99% of the cases.